Covering the Uninsured– Growing Need, Strained Resources –Number of Uninsured Americans Is Growing 

The number of uninsured under age 65 increased by nearly six million between 2000 and 2004 (Figure 1), primarily due to a decline in employer-sponsored insurance.

The share with job-based coverage dropped by almost five percentage points between 2000 and 2004.

This reflects fewer families with two full-time workers and more  with only one member working full-time or part-time, or no workers at all. Jobs also shifted from larger firms to businesses with less than 25 employees and self-employment, and to industries that have been less likely to offer health benefits.

Thus, although employment began to pick up in 2003, the number of uninsured still grew.

Household incomes declined and national poverty rates increased throughout the 2000-2004 period. The decline in job based coverage eased in the last year of this period; however, the shifts in jobs and family incomes raised the number who lost – and who are at risk of losing – their health coverage.

Both children and adults experienced an equally large drop in employer coverage. However children fared much better than adults because increases in Medicaid and SCHIP coverage fully offset their loss.

The share of children covered by public insurance increased from 17% to 22%, resulting in no increase in the number of uninsured children and even a slight decrease in the share of children without coverage (Figure 2).
All of the increase in the number of uninsured between 2000 and 2004 occurred among adults. Medicaid coverage increased slightly for adults as well during this time (moving from 5% to 6% of nonelderly adults). However, the role of Medicaid for nonelderly adults is limited, covering some parents and low income disabled individuals, but most adults without dependent children – regardless how poor – remain ineligible for Medicaid.

The majority of the growth in uninsured adults has been among those who are poor (46%) or near-poor (22%), and disproportionately among southern states. Younger adults (age 19-34), who make up about a third of all noneldelry adults, comprised almost half of the growth in uninsured adults between 2000 and 2004 (Figure 3).

While minorities and non-citizens are more likely to be uninsured, they do not account for the majority of the growth in the uninsured over these four years.

The Kaiser Commission on Medicaid and the Uninsured provides information and analysis on health care coverage and access for the low-income population, with a special focus on Medicaid’s role and coverage of the uninsured. Begun in 1991 and based in the Kaiser Family Foundation’s Washington, DC office, the Commission is the largest operating program of the Foundation. The Commission’s work is conducted by Foundation staff under the guidance of a bipartisan group of national leaders and experts in health care and public policy.

Federal Support of Health Care for the Uninsured Wanes

In 2004, America’s 46 million uninsured received about $41

billion dollars in uncompensated care – care that was not

paid for either by the uninsured themselves or by another

identifiable source. Most of the care received by the

uninsured is provided through the informal network of

hospitals, clinics, and health centers, referred to as the

“safety net,” which is supported by federal, state, and local

government as well as private sources. About half of all

safety net funds come from the federal government, but

they still comprise less than one percent of overall federal

spending.

Has Spending Kept Pace with the Growth in the Uninsured?”, KCMU, November 2005.

Total federal outlays for the health care safety net grew

from $19.8 billion in 2001 to $22.8 billion in 2004, an

increase of 15.4% (Figure 4). This overall increase reflects

a decline in Medicaid spending (through its supplemental

payments to providers), which was more than offset by

increased spending for direct care programs – including

health centers – and by Medicare.

Has Spending Kept Pace with the Growth in the Uninsured?”, KCMU, November 2005.

Federal support for health centers has increased by more

than 50 percent recently, growing from $0.43 billion in 2001

to $0.67 billion in 2004. However, federal funding for health

centers still accounts for less than three percent of total

federal spending on the safety net (Figure 5).

Because medical spending overall is growing rapidly –

nearly 14 percent during this time span – it’s important to

weigh these increases relative to what any new dollars can

buy. After adjusting for medical inflation and using constant

2004 dollars, total federal spending on the safety net

increased by only slightly more than one percent between

2001 and 2004 (Figure 6). Because the number of

uninsured grew by nearly 5 million people, federal spending

actually decreased from $546 to $498 per uninsured person

over this time – a decline of 8.9%.

The federal commitment to the health care safety net has

not kept pace with the growth in the uninsured, and future

federal funding appears unlikely to reverse this trend.

Most federal safety net spending flows through Medicare and

Medicaid, both of which are under severe budgetary

pressures. If safety net resources continue to decrease as

the number of uninsured increases, the amount of care

provided to the uninsured will be jeopardized, with further

consequences on their health and the health of the country.

Based on Holahan and Cook, “Changes In Economic Conditions And Health Insurance Coverage, 2000-2004,” Health Affairs Web Exclusive, November 1, 2005, and Hadley et al., “Federal Spending on the Health Care Safety Net from 2001 – 2004: Has Spending Kept Pace with the Growth in the Uninsured?”, KCMU, November 2005, Publication #7425. For additional copies of this publication (#7429), please visit kff.org.